Legislature(2013 - 2014)SENATE FINANCE 532
03/05/2014 05:00 PM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB169 | |
| SB129 | |
| SB161 | |
| SB191 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 129 | TELECONFERENCED | |
| + | SB 161 | TELECONFERENCED | |
| *+ | SB 191 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 169 | TELECONFERENCED | |
| += | SB 138 | TELECONFERENCED | |
SENATE BILL NO. 191
"An Act relating to the authority to transfer money
from the general fund to general obligation bond
construction funds or accounts; and providing for an
effective date."
6:25:48 PM
SUZANNE ARMSTRONG, STAFF, SENATOR KEVIN MEYER, stated that
SB 191 proposed an administrative fix and would establish
parameters for transferring general funds to a geo-bond
construction fund. She relayed that under current statute
the commissioner of administration on recommendation of the
State Bond Committee, and after approval of the Legislative
Budget and Audit Committee (LB&A), may temporarily transfer
funds from the general fund to geo-bond construction funds
when the fund had been temporarily exhausted. She said that
the legislation would allow for the transfer to occur
without approval from LB&A as long as the transfer did not
exceed 25 percent of the amount authorized for the geo-
bonds. If the number was over 25 percent it would need to
be approved by LB&A. Additionally, SB 191 stipulated that
the loan from the general fund must be paid back within a
15 month time period, which fell in line with the Internal
Revenue Service (IRS) code requirement that advanced fund
bond issuance loans must be repaid by bod proceeds within
18 months. The changes proposed in the bill would allow for
increased certainty in project schedule and cash-flow,
provide greater ability for the State Bond Committee to
respond to unforeseen increases in project expenditures
from the construction funds and provide greater flexibility
and potentially a more advantageous position for the State
Bond Committee in executing state bond sales. She concluded
that the change in law would eliminate the negative carry
cost of borrowed funds sitting in construction funds for
extended timeframes; the potential opportunity cost of
investing funds held in the general fund is off-set by the
cost of paying interest expense on the borrowed funds that
are not yet needed.
6:28:56 PM
LAURA PIERRE, STAFF, SENATOR ANNA FAIRCLOUGH, added that
added that while the department would no longer have to
seek approval from LB&A, the division would still need to
be notified when a transfer occurred.
6:29:31 PM
DEVON MITCHEL, STATE DEBT MANAGER, DEPARTMENT OF REVENUE,
related that the state had not issued any general
obligation bonds between 1984 and 2003. He said that during
that time period there were significant changes to the IRS
code relating to tax exempt bonds. The bill would allow for
more administrative flexibility for the implementation of
the bonds authorized by the legislature.
6:31:12 PM
Co-Chair Meyer probed the potential savings to the state.
Mr. Mitchell replied that the savings would be noticeable.
6:33:43 PM
SB 191 was HEARD and HELD in committee for further
consideration.
Co-Chair Meyer discussed housekeeping.